The initiating molecular events in the most common types of thyroid cancer frequently involve chromosomal translocations, in contrast to other solid tumor types in which such events are rare. The RET/PTC rearranged oncogene accounts for the majority of radiation-induced papillary thyroid cancer (PTC) and up to 50% of sporadic PTC. An analogous chromosomal rearrangement occurs frequently (30-60%) in follicular thyroid cancer (FTC). This rearrangement involves a t(2;3)(q 13;p25) translocation, which fuses the thyroid specific transcription factor pax8 gene (chromosome 2) and the PPARgamma receptor gene (chromosome 3), resulting in the expression of a fusion protein, designated PPFP. PPFP contains a partial length pax8 and a full-length PPARgamma receptor, which is expressed under the control of the pax8 promoter in a thyroidspecific fashion. We have confirmed that almost 60% of FTC express PPFP. We have also shown that PPFP can transform Nthy-ori 3-1 thyroid cells in vitro, causing increased cell growth, decreased apoptosis, and anchorage-independent growth. PPFP also transforms NIH 3T3 cells. The inhibition of apoptosis is due in part to down-regulation of TRAIL-R2. Our findings also strongly suggest that the changes in growth and apoptosis are mediated by inhibition of wild-type PPARgamma. These data suggest that PPFP is an oncoprotein that functions in FTC tumorigenesis. In the current studies we will study the ability of PPFP to transform thyroctes in an in vivo mouse knockin model, designed to recapitulate all the genetic features of the human disease (Aim 1). In Aim 2 we will study the mechanism of PPFP's dominant negative inhibition of PPARgamma. Finally, in Aim 3 we will identify the downstream PPARgamma-dependent effector pathways that mediate PPFP's transforming properties. These studies will test the following hypotheses: (1) PPFP is an oncoprotein, resulting from chromosomal rearrangements unique to FTC, and is sufficient to transform thyroid folliciular cells in vivo. (2) PPFP is involved in the early stages of FTC tumorigenesis. (3) PPFP acts solely through dominant negative inhibition of PPARgamma. (4) The inhibitory effects of PPFP can be modulated by PPARgamma and RXR Iigand binding. (5) PPFP alters multiple PARgamma-regulated transcription pathways, which alter growth control and/or apoptosis.